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How does mileage affect my car insurance?

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Here's what you need to know...
  • Usually insurance costs more for a new car. However, if you have an antique or classic car, insurance is more expensive despite having fewer miles on the vehicle
  • For everyday cars, the more mileage you put on your car, the more you are using it and the risk of damage increases which means insurance providers will charge more for coverage
  • Insurance companies charge you according to the potential costs you present to them. Therefore, the less you drive, the less you will usually pay

While there are many factors that affect the rates of your car insurance, mileage is one of the bigger, ongoing ones. The mileage on your car will make a difference in what you pay when you first insure it, but the miles you put on your car afterward will also have a substantial impact.

No matter how many miles you have, you can always get a cheaper rate by entering your zip code now to get multiple car insurance quotes.

Reducing Your Car Insurance Mileage

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When you buy a car you certainly don’t buy it with the intention of storing it in a garage for rare, occasional use. Unless, of course, the car is a show car or a project car! In that case, look into very specialized antique or classic car insurance.

Therefore, plan on putting miles on your car and plan on your insurance possibly going up as a result of it. One of the best ways to avoid an increase in your car insurance premium is to keep your mileage to a minimum.

When you first insure your car, your insurance company will ask you how many miles you estimate your car will be driven annually. Try to keep this number as accurate as possible. If you underestimate the mileage, your car insurance premium can easily increase.

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Mileage Accuracy

Insurance companies will periodically ask how many miles you have on your car. It is never a good idea to cheat on your car insurance, so even if you are tempted to lie about this, don’t do it.

The only person you are hurting is yourself, especially if you have a claim that can’t be substantiated by your mileage.

Imagine if you tell your car insurance company you only have 10,000 miles on it when you have 17,000 miles. Although it seems like a small white lie, it can technically be considered insurance fraud; and this type of insurance fraud will only save you a minute amount of money.

Yes, you may benefit from a low mileage discount, but it’s not worth the cost of losing your coverage.

The insurance company will most likely not come to your house to verify your car’s mileage. However, if you have any accident or any insurance claim, your mileage will be reviewed by the insurance adjuster and the repair shop.

If this happens, your world could crumble around you if your mileage is not close to what is expected.

Your insurance claim can legitimately be denied, leaving you financially responsible for all damages involved. You can also be held liable for insurance fraud, which would cause a hassle because it would have to be proven in a court of law.

Estimating Car Insurance

Stacks of coins next to a calculatorThe best way to avoid problems with your car insurance and still pay a fair rate is to be honest and calculate your mileage as accurately as possible. If your mileage varies widely on an annual basis, discuss this exception with your car insurance agent.

Otherwise estimating the mileage for your car insurance is relatively easy. The initial mileage on your car becomes negligible once you buy your car insurance. So, after you report your beginning mileage you only need to determine how many miles you drive on an annual basis.

Clock how many miles you drive to work and back and then calculate your annual usage for using your car for work. Add personal usage to your mileage as well.

It is also a good idea to include your annual road trip for your vacation. If you drive 500 miles one way every summer to visit your aunt in a bordering state, add 1,000 miles to your mileage estimation.

The difference may not increase your insurance premium at all, but at least you will have appropriate coverage.

The insurance company is not going to hold you to every mile you estimate. They use your estimate to gauge if you drive 7,500 miles or less every year or if you drive more than 10,000 miles every year.

It is in your best interest to give a fair assessment of your estimated mileage to your insurance agent so that your insurance premium is calculated correctly.

If you are not a regular driver, your car insurance should be somewhat less than the person who wears out a car every couple of years. Mileage of 7,500 or less annually is usually considered average and should garner you a fair rate.

Shop around to avoid paying too much for your car insurance. Enter your zip code now to compare car insurance quotes!

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